To determine Prepare an entry to allocate the under or over applied overhead . Explanation Journal entries ( job costing ): The journal entries are prepared in order to record the day to day transactions of the entity. The journal entries in job costing are prepared by starting from the materials inventory. The balances are then transferred to work-in-process inventory and thereafter to finished goods inventory. Over-applied overheads: This is the amount of overhead which arises when the amount of actual overheads is less than the amount of overheads applied. Under-applied overheads: It is the amount of overhead cost which is not applied to the jobs during the period. Under-applied overheads occur when the actual overheads are more than the applied overheads. Journal entry for the allocation of under applied overhead: Date Accounts and explanation Post Ref. Debit Credit Applied manufacturing overhead (1) $ 467,500 Work-in-process inventory (8%) (2) $ 920 Finished goods inventory (22%) (3) $ 2,530 Cost of goods sold (70%) (4) $ 8,050 Manufacturing overhead control (5) $ 479,000 (To record under applied overhead) Table: (2) Working note 1: Compute the applied manufacturing overhead: Particulars Amount Work-in-process inventory $ 37,400 Add: Finished goods inventory $ 102,850 Add: Cost of goods sold $ 327,250 Applied manufacturing overhead $ 467,500 Table: (3) Working note 2: Compute the rate of work-in-process inventory in applied manufacturing overhead: Rate of Work-in-process = Work-in-process inventory Total mamufacturing overhead × 100 = $ 37 , 400 $ 467 , 500 × 100 = 8 % Compute the work-in-process inventory: Work - in- process inventory = Rate of work-in-process × Under applied manufacturing overhead = 8% × $11,500 = $920 Working note 3: Compute the rate of finished goods inventory in applied manufacturing overhead: Rate of finished goods = Finished goods inventory Total mamufacturing overhead × 100 <

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Chapter 7, Problem 30E

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Ch. 7 - What are characteristics of companies that are...Ch. 7 - Direct labor-hours and direct labor dollars are...Ch. 7 - What is the purpose of having two manufacturing...Ch. 7 - How does the accountant know what to record for...Ch. 7 - How is job costing in service organizations (for...Ch. 7 - What are the costs of a product using normal...Ch. 7 - Prob. 7RQ Ch. 7 - What are three common sources of improprieties in...Ch. 7 - In the context of job costing, what are projects?...Ch. 7 - Why do most companies use normal or standard...

Ch. 7 - Why is control of materials important from a...Ch. 7 - Worrying about the choice of an overhead...Ch. 7 - Prob. 13CADQ Ch. 7 - Interview the manager of a campus print shop or a...Ch. 7 - Would a dentist, an architect, a landscaper, and a...Ch. 7 - Consider two firms in the same industry. Is it...Ch. 7 - Prob. 17CADQ Ch. 7 - Assume that you have been asked to paint the...Ch. 7 - Prob. 19CADQ Ch. 7 - ABC Consultants works for only two clients: a...Ch. 7 - Prob. 21CADQ Ch. 7 - Assigning Costs to Jobs The following transactions...Ch. 7 - Assigning Costs to Jobs Sunset Products...Ch. 7 - Assigning Costs to Jobs Forest Components makes...Ch. 7 - Assigning Costs to Jobs Partially completed...Ch. 7 - Assigning Costs to Jobs Selected information from...Ch. 7 - Assigning Costs to Jobs Partially completed...Ch. 7 - Predetermined Overhead Rates Dixboro Company...Ch. 7 - Predetermined Overhead Rates Southern Rim Parts...Ch. 7 - Refer to the information in Exercise 7-29. Prepare...Ch. 7 - How much overhead was applied to each of the four...Ch. 7 - Refer to the information in Exercise 7-31. Prepare...Ch. 7 - Predetermined Overhead Rates Aspen Company...Ch. 7 - Prob. 34E Ch. 7 - Applying Overhead Using a Predetermined Rate Marys...Ch. 7 - Applying Overhead Using a Predetermined Rate Turco...Ch. 7 - Calculating Over- or Underapplied Overhead Toms...Ch. 7 - Predetermined Overhead Rates: Ethical Issues...Ch. 7 - Compute the predetermined rate assuming that...Ch. 7 - Job Costing in a Service Organization At the...Ch. 7 - Job Costing in a Service Organization For August,...Ch. 7 - Job Costing in a Service Organization Allocation...Ch. 7 - Job Costing in a Service Organization TechMaster...Ch. 7 - Prob. 44E Ch. 7 - Prob. 45E Ch. 7 - Prob. 46P Ch. 7 - Estimate Machine-Hours Worked from Overhead Data...Ch. 7 - Estimate Hours Worked from Overhead Data Capitol,...Ch. 7 - What will Wabash report as Cost of Goods Sold for...Ch. 7 - Assigning CostsMissing Data The following...Ch. 7 - Assigning Costs: Missing Data The following...Ch. 7 - Analysis of Overhead Using a Predetermined Rate...Ch. 7 - Analysis of Overhead Using a Predetermined Rate...Ch. 7 - Finding Missing Data A new computer virus...Ch. 7 - Cost Accumulation: Service Youth Athletic Services...Ch. 7 - Job Costs: Service Company For the month of July,...Ch. 7 - Job Costs in a Service Company On September 1, two...Ch. 7 - Tracing Costs in a Job Company The following...Ch. 7 - Cost Flows through Accounts Brighton Services...Ch. 7 - Show Flow of Costs to Jobs Kims Asphalt does...Ch. 7 - Reconstruct Missing Data A tornado struck the only...Ch. 7 - Find Missing Data IYF Corporation manufactures...Ch. 7 - Find Missing Data Accounting records for NIC...Ch. 7 - Incomplete Data: Job Costing Chelsea Household...Ch. 7 - Job Costing and Ethics Old Port Shipyards does...Ch. 7 - Job Costing and Ethics Chuck Moore supervises two...Ch. 7 - Job Costing and Ethics Global Partners is a...Ch. 7 - Prob. 68IC Ch. 7 - What is the predetermined overhead rate for...

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